I can’t say this enough…there needs to be a shared responsibility and equity in the home when you are considering a multigenerational living arrangement.
Take my situation as a lesson.
When we embarked on this adventure, I was newly divorced. My parents were struggling in their life. My dad was retired, while my stepmom was still working and making a significant daily commute as a result of the living arrangement my dad chose without considering her. There were a lot of pros and cons when considering sharing a household, but we all agreed the pros far outweighed the cons.
Considering my recent divorce, we agreed that it made sense at the time to get the best mortgage rates by putting the home in my parent’s name. That has turned out to not be the best long-term decision for all of us. You see in the past six years the housing market has boomed and as with most people, my financial status has improved as the years passed and I recovered from my divorce.
Fast forward to current life and I’m paying 50% of a mortgage that I have zero equity in. I’m paying 50% of a mortgage that I’m getting not credit for on my credit report. I have no rental history on paper. The reality is if both of them were to die unexpectedly tomorrow, I wouldn’t have a home or any recourse to protect myself. They have been resistant to draft legal wills to ensure I am protected and as many older people, they do not want to talk or plan for the future.
The fact of the matter is that I am not protected in any way in this arrangement.
If you’re considering a multigenerational living arrangement learn from my mistakes and make sure you have adequate protections in place for your financial future. It may be a little more expensive from the onset, but it will be worth it in the long run.